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Decoding the Tech behind Contactless Payments: From RFID to EMV and NFC

Contactless payments have become the norm, but terms like NFC, EMV, and RFID can be confusing. This article highlights the history and underlying technologies of contactless payments, from RFID, which emerged in the 1980s for inventory tracking, to NFC and EMV microchips.

Penny Finley
Decoding the Tech behind Contactless Payments: From RFID to EMV and NFC

Contactless payments come with different terms and abbreviations. Users have to accommodate themselves with complicated notions such as NFC, EMV, or RFID, and we are here to make them simple to understand for our customers.

Contactless took the payments industry by storm starting in September 2007, when the Barclaycard One Plus contactless payment card was launched. More functionalities have been added ever since, and contactless payment technology has become the norm nowadays due to its immense popularity. This article is meant to illuminate the underlying technologies that power contactless payments.

Brief history highlights

We mentioned September 2007, but other critical dates in the history of contactless payments also have to be mentioned. Data from Thames Technology lets us know that:

  • In 1995, South Korea launched UPass, a contactless payment card for commuters
  • 1996 marks the first EMV standard version
  • In 2002, Philips and Sony partnered to develop the NFC standard
  • In 2003, Mastercard launched its contactless payment cards, and in 2004, Visa Asia Pacific launched its EMV-compatible smart card.
  • In 2011, Google Wallet, alongside Android Pay, entered the scene, allowing smartphones to transact for the first time.
  • Apple Pay was launched in 2014
  • In 2015, Apple started introducing wearable contactless technology, such as the Apple Watch.
  • Starting with 2020, among the pandemic’s effects, we could encounter the positive influences of digitalisation and contactless technology.

Zooming in on contactless technology

Contactless payments are based on particular technologies, from QR codes to NFC transactions. We will discuss them chronologically.

  • Radiofrequency identification (RFID): This technology transmits data via radio waves. RFID emerged in the 1980s as a way to improve barcode scanning. Consisting of an antenna, tag, and reader, the RFID system enables data transmission when a tag sends a pulse registered by the reader. Usually, RFID technology is used to prevent theft, track inventory or attendees, and control access.
  • Near field communication (NFC): developed in the early 2000s, NFC is believed to be derived from RFID technology. Unlike RFID, NFC uses a higher frequency and can transmit data quicker than RFID. However, NFC requires a shorter distance to work. Another difference is that a smartphone with NFC technology can act as a tag and a reader. Usually, NFC is used for data transfers and mobile payments.
  • Europay, Mastercard, Visa (EMV): this technology refers to the latest microchips introduced in payment cards. Before EMV, debit or credit cards had to be swiped for data transfers. EMV emerged to improve security because a card with an EMV microchip cannot be used if stolen. Also, EMV transmits encrypted data instead of regular magnetic strips, which are more prone to fraudulent activities. EMV’s security and NFC technology make a card suitable for a positive contactless payment experience.
  • Also, it is crucial to mention quick response (QR) codes: they first appeared in 1994 in Japan to store more information than barcodes. More popular in Asia, QR codes began to be used as a payment method in 2010, and nowadays, QR code payments make up for 1/3 of China’s payments. By scanning a QR code with a smartphone, users are prompted to access a secure link to complete their checkout experience. Typically, QR codes redirect users to various websites, store information, or send customers to fill in payment information terminals.
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